The Naperville City Council has roughly 15 months before making its next major decision on how electricity will be supplied to the city after 2035.
Electric Utility Director Brian Groth laid out the dates that key decisions need to be made by the council at a meeting last week. It was the first of several presentations to be made in the coming months as the city delves into the options available.
While Naperville’s contract with its current energy provider, Illinois Municipal Electric Agency (IMEA), does not expire until 2035, the joint action agency has asked Naperville to extend its contract with it to 2055, an action to which 29 of its 32 member municipalities have agreed but which the council put on hold in August.
“We’ve got 15 months before we have to make our first strategic decision and the clock will not stop,” Mayor Scott Wehrli said.
Naperville’s non-IMEA energy options and the date by which a decision must be made are:
- Formation or participation in a new joint action agency, which must be completed by June 2027;
- Market participation with asset ownership, which must be completed by June 2028;
- Market participation without asset ownership, which must be completed by June 2029;
- Sell the city’s electric utility to a private equity firm or investor-owned utility, which must be completed by Sepember 2034.
“While dates could move slightly, this timeline of decisions is driven by city budgeting, city staffing, market auctions, PJM and forecasted material lead times,” Groth said.
Looming threats of power shortfalls in Illinois in the next five years will also be a factor. Naperville’s grid operator PJM Interconnection projects there could be an energy shortfall as soon as 2029 whereas neighboring grid operator Midcontinent Independent System Operator says an energy shortfall could occur as soon as 2028, according to a January report from the North American Electric Reliability Corp.
Council members will hear more about each option in the coming months before making a final decision, although Groth noted in his presentation that the more advance time city staff are given to pursue a specific pathway, the better.
Joining or forming a joint action agency — a group that provides energy to member municipalities — requires the longest lead time due to the complexities around contract negotiations for joining such agencies.
“I would say that negotiations to join an existing joint action agency are a lengthy process,” Groth said. “What the buy-in would be, if we are going to buy into a generation mix, what that negotiated dollar amount would be, if we’re just going for services … I don’t want to give any false hope that we can push a deadline and then try and bring that back before 2035.”
In addition, if Naperville were to create a new joint action agency, that process would likely take just as long if not longer, he said.
To get a better understanding of how viable options like creating a new joint action agency would be, Councilman Patrick Kelly suggested city staff speak with St. Charles about whether it is considering joining a joint action agency or pursuing another option. St. Charles was one municipality that voted to not renew with IMEA last year.
Market participation with asset ownership — or buying directly from wholesale energy markets while owning power-generating or storage assets of any kind — would require the second longest lead time since it takes time to engineer, procure, integrate and make it operational, said Groth, adding that some assets take longer to obtain than others.
Market participation without asset ownership has the third longest lead time. It involves purchasing electricity on the market or through suppliers without owning any of the facilities.
Selling the electric utility would require the least amount of lead time, although discussions could start sooner than 2034.
“Obviously, we’d like to start any conversations earlier than the date that’s listed here,” Groth said. “This is not intended to be a date when we start the conversation, it’s the date to make the final decision.”
Over the coming months, council members will assess how each option fits in with the electric utility’s mission to provide reliable, affordable and sustainable energy to the public. The council also plans to more clearly define Naperville’s sustainability goals in a September strategy workshop, when the results from a Naperville citizen survey are available, City Manager Doug Krieger said.
Councilman Ian Holzhauer said he was specifically interested in examining the Naperville electric utility’s current annual greenhouse gas emissions and what those numbers could look like with other energy sources.
“I am much more focused on greenhouse gas emissions than I am on us being able to say, ‘Oh, we have a carbon free resource.’ … I think what is going to affect our future generations the most is not how many solar fields we build but … how much we emit in greenhouse gases,” he said.
The next presentation on the options available is planned for May.
cstein@chicagotribune.com
